The mandate to the European Commission states that “the Agreement will include an appropriate dispute settlement mechanism”.

The investor-state dispute settlement (ISDS) mechanism in TTIP has drawn fierce criticism from civil society groups from both sides of the Atlantic. They claimed in December 2013, in a letter to the European Commission and the Office of the United States Trade Representative that ISDS was “a one-way street by which corporations can challenge government policies, but neither governments nor individuals are granted any comparable rights to hold corporations accountable”.

In 2014, the European Commission launched a public consultation about the inclusion of ISDS in TTIP. The result was very clear: 97% of the 150,000 participants said no to ISDS.

The European Commission put forward in 2015 a proposal for an alternative mechanism, named investment court system, a move it said would make ISDS more transparent and allow states to appeal against multinationals’ challenges. But groups portrayed the suggested changes as putting “lipstick on a pig”, as they are merely cosmetic changes, and would still allow corporations to sue governments in parallel court settings.

That concern is a real and serious one, but there is also a more direct and crude problem: parties (or their lawyers) bribing, or making backdoor deals with, the arbitrators to secure a favorable outcome.

Crystallex — owed $1.4 billion for the expropriation of its Venezuela mining subsidiary — has moved U.S. Federal Court in Delaware to seize Petroleos de Venezuela Holding, the parent company of PDVSA’s American unit Citgo Holding.

About the ISDS platform

The ISDS platform is a resource tool about the controversial investor-state dispute settlement (ISDS) mechanism in trade and investment agreements. It aims to provide the latest news, campaign tools and critical analysis to groups engaged in defeating ISDS.